Portfolio Update - Q2 2025
Conviction Over Comfort: Rebalancing a long-term portfolio when good is not good enough.
My portfolio's return so far this year stands at +6.8%, which I consider reasonably positive, especially given that the euro's performance has been the primary detractor this semester. Despite the persistent volatility in global markets, I'm comfortable with the portfolio's performance and, more importantly, with the quality of the underlying assets.
This quarter, I've undertaken a significant restructuring—likely one of the most intensive since I began writing this blog. This wasn't an impulsive decision but rather a deliberate process that started months ago, as I began to question whether I was truly optimizing every euro invested. My conclusion was that, in turbulent environments like the current one, it makes more sense to double down on high-conviction ideas, even if that means making uncomfortable decisions, such as divesting assets with unrealized losses.
There's no philosophical breach here; my core investment principles remain unchanged. I continue to seek resilient businesses with reinvestment capacity, led by excellent management teams, and with long-term horizons. However, I'm also keenly aware that capital is finite. When the market penalizes indiscriminately, it can be strategically advantageous to sacrifice what's merely "good" to acquire what's truly "exceptional."
I don't rule out buying back some of the companies I've sold if conditions change and I raise more cash in the future. However, right now, I believe the priority is to strengthen the portfolio, reduce the number of holdings, and increase overall quality. I don't aspire to be right about every single move, but I do aspire to build a portfolio more consistent with my primary goal: preserving and increasing my family's purchasing power for decades to come.
This quarter, I also initiated a new position in a company I've been following for quite some time, and another in a company I've followed for a relatively short period, but whose recent stock market correction has substantially improved its risk-return profile. This decision isn't without uncertainty, but I believe the best opportunities often emerge not when everything seems perfect, but rather when the market begins to doubt the very things it once idolized.
As usual, I've detailed below all the transactions of the quarter and the reasoning behind each one.
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